ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -One of the defining features of economics is scarcity, which deals with how people satisfy unlimited wants and needs with limited resources. Scarcity affects the monetary value people place on goods and services and how governments and private firms decide to distribute resources.

Detailed explanation-2: -Scarcity is the concept that resources are only available in limited supply, whereas society’s demand for those resources is essentially unlimited.

Detailed explanation-3: -Understanding Scarcity In his 1932 Essay on the Nature and Significance of Economic Science, British economist Lionel Robbins defined the discipline in terms of scarcity: Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.

Detailed explanation-4: -’Scarcity of resources’ implies that there are unlimited wants to be fulfilled by limited resources. The basic concern of an economy is to allocate the scarce resources to the best possible use in the face of unlimited wants. Thus, the problem of scarcity forces an economy to make a choice among various alternatives.

Detailed explanation-5: -The economic problem of scarcity arises because needs and wants are unlimited and the resources (or means) to fulfil these wants are limited. The statement is indeed true.